Are U.S. airlines destined to disappoint?

October 16, 2007

By Dan Reed, USA TODAY

Maybe all the hubbub about flight delays and shoddy service is beginning to register with the USA's big airlines.

After cutting costs in Chapter 11 bankruptcy, Northwest Airlines nwa CEO Doug Steenland now says low operating costs are just "the opening ante" for air carriers to compete successfully. "Customer focus is going to define the winners in the years ahead," he says.

No. 1 American Airlines amr said recently it will pass up potential revenue by not selling in advance many of its middle seats during the peak Thanksgiving travel season. That allows American to more easily accommodate travelers knocked off their travel plans by bad weather. And, in the last two years, most big U.S. carriers have created executive-level positions to address the problem of widespread customer dissatisfaction.

So, are good times for travelers just around the corner? Don't bet on it, say skeptical travelers, industry insiders and customer-service experts who say the peculiarities of the airline business will forever leave the industry below average in satisfying travelers. It's just not a business that's wired for pleasing customers in the way that, for example, retailer Nordstrom jwm is.

The vagaries of weather are just part of it. Among other factors: a business culture in which the costs of fuel and labor are viewed as more important than happy customers in determining profitability, recent cuts that may go too deep to ever deliver exceptional service, and customer attitudes that discount the value of good service from airlines even when they get it.

"It is unlikely that airlines will ever rank at the average, and certainly not above the average, in customer satisfaction because of some of the intrinsic factors … that will never change," says David Grizzle, a longtime executive at Continental Airlines.cal Since December 2005, Grizzle has been senior vice president of customer experience.

University of Michigan research shows that airline passengers consistently have been among the least-satisfied consumers in the USA for the past 13 years. Even the U.S. Postal Service, once the poster child for bad customer service, now swamps most airlines with a respectable 73 on the 100-point American Customer Satisfaction index. The airlines scored an abysmal 63 in the annual ratings issued earlier this year.

The ratings included one airline industry bright spot: Discount giant Southwest luv scored 76, 1 point above the average for all companies whose customers were surveyed.

The airline industry score is low enough, says Michigan business professor Claes Fornell, the ACSI's creator, that most carriers would be in danger of failing if their customers had travel options.

"The company that provides lousy service performance is normally punished by consumers, who will go elsewhere," says Fornell. "But airlines are different. In most cases, the consumers really don't have anywhere else go."

Skeptics abound

Given the airlines' long history of poor customer service, and past failures to live up to promises to improve, skeptics about the industry's new push to improve service abound. Among them is Ron Stagner, a regional sales manager for a dancewear company from Kansas City, who travels about 40 weeks a year.

Airline executives from "the CEO on down, should fly their planes like any other customer," Stagner says, figuring that if the bosses had to endure what the masses do, changes would happen faster.